Brussels 5 October 2017 Implementation Workshop Tariff Network Code
Welcome
Brussels 5 October 2017 Introduction TAR NC Implementation Workshop Irina Oshchepkova Tariff Subject Manager, ENTSOG
Agenda 1. Agenda of the Workshop 2. Organisational matters 3. Meeting objectives 4
Agenda [1] Welcome Registration and welcome coffee Introduction EC view 1 st Session ENTSOG s 2 nd Implementation WS Transparency Updated publication requirements Publication requirements and Transparency Platform Standardised section for data publication on TSO/NRA website Stakeholder view Coffee break 5
Agenda [2] 2 nd Session NRA perspective ACER s perspective Lunch break Stakeholder view 3 rd Session IDoc updates Stakeholder view Coffee break TAR NC and Storage Stakeholder view NRA/ACER perspective Addressing stakeholder concerns 4 th Session Up-coming year/monitoring Implementation and Effect monitoring Conclusions 6
Organisational matters 7
Meeting objectives Share implementation experiences and plans Updated TAR IDoc Views of Prime Movers, EC, ACER and NRAs 8
EC view
1 st Session: Transparency
Brussels 5 October 2017 Updated publication requirements TAR NC Implementation Workshop Andreas Martens, ENTSOG Tariff Adviser Kathrine Stannov, Transparency Subject Manager, ENTSOG
Agenda 1. Recap of the 1st workshop: What, When and How? 2. Early compliance with publication requirements 3. Conclusion 12
1. Recap from 1 st Implementation Workshop 13
Something you took away What When How 14
What to publish before annual yearly capacity auctions 15
What to publish before tariff period 4 blocks of information Methodology parameters Revenue information Other tariffs not published before auctions Tariff evolution 16
What (ENTSOG TP) - Reserve prices Applicable tariff - Hourly vs Daily regime - Applicable Tariff in common unit - Multipliers / seasonal factors / discounts for interruptible capacity - Flow-based charges Commodities - Simulation costs for flowing 1 GWh/day/year - Interconnection points - Link to TSO or NRA website with all tariff information Detailed description will follow with next presentation 17
New Theme - Who: Responsibility Split TSO/NRAs MS Information in Article 29 TSO/NRA website Information in Article 30 TSO/NRA website Information in Article 31(2) sending information to ENTSOG s TP Austria NRA NRA TSO Czech Republic NRA NRA TSO France NRA NRA TSO Hungary NRA NRA NRA Ireland To be decided To be decided To be decided Poland TSO TSO TSO Portugal TSO publishes an assessment of the probability of interruption NRA TSO NRA publishes the rest Spain To be decided To be decided To be decided MS not mentioned: TSO is responsible for all the publication. Poland is included as responsibility has shifted recently to be the TSO 18
2. Early compliance with publication requirements 2.1. Detailed description 19
Early compliance with publication requirements ENTSOG s TP Dec 2017: tariffs applicable for the current gas year (1 Oct 2017 1 Oct 2018) - Reserve prices for all MS - Flow-based charges for MSs whose tariff period is other than one year or other than January to December TSO/NRA website By the end of 2017: applicable revenue information per Art. 30(1)(b) for the current tariff period for MSs whose tariff period is other then one year or other then January to December Will be explained in details in next part 20
When March status TP 1 (Jan-Dec) TP 1 (Apr-Mar) min 30 days before: RPM, revenue, other tariffs, tariff changes, trends, model TP 1 (Jul-Jun) TP 1 (Oct-Sep) Oct Jan Apr Jul Oct Jan Apr Jul Oct 2017 2018 AD 2 min 30 days before: reserve prices Yearly CAP auction gas year 21
When September status Dec 17: early compliance TP 0 TP 0 TP 0 TP 1 (Jan-Dec) TP 1 (Apr-Mar) TP 1 (Jul-Jun) TP 0 TP 1 (Oct-Sep) Oct Jan Apr Jul Oct Jan Apr Jul Oct 2017 2018 AD 2 min 30 days before: RPM, revenue, other tariffs, tariff changes, trends, model min 30 days before: reserve prices gas year 22
2. Early compliance with publication requirements 2.2. Publications status quo 23
Tariff Period Different throughout Member States January-December April-March July-June October-September In HU + BG, the tariff period will change from January-December to October-September as from 1 October 2017. 24
Publication on TP before Tariff Period 1 December March June September Before the tariff period, flow-based charges (commodities) and simulation costs must be published on the TP. 25
Publication on TP before the ann. auctions Tariff Period 1 June Before the annual auctions, reserve prices (applicable tariffs) referring to the next gas year must be published on the TP. 26
2. Early compliance with publication requirements 2.2. Publications changed status 27
Publication on TP Dec 17 / Tariff period 0: Res. Prices December 2017 For increased stakeholder information, TSOs and NRAs have decided on early compliance and will publish reserve prices for the current gas year. 28
Publication on TP Dec 17 / Tariff period 0: Com. + Sim. Jan-Dec countries (Future Tariff Period) Everyone else (Current Tariff Period) For increased stakeholder information, TSOs and NRAs have decided on early compliance and will publish flow-based charges and simulations for the current tariff period. 29
Revenue publication on TSO/NRA website Dec 17 Jan-Dec countries (Future Tariff Period) Everyone else: Current tariff period For increased stakeholder information, TSOs and NRAs have decided on early compliance and will publish their revenues for the current tariff period on their respective websites, available via ENTSOG TP. 30
3. Conclusion 31
Something to take away Overview and comparison for IPs Details on MS level for all relevant points Start looking in December 2017 32
Brussels 5 October 2017 Publication requirements and Transparency Platform TAR NC Implementation Workshop Marin Zwetkow, ENTSOG Transparency Adviser
Agenda 1. The standardised table on ENTSOG s TP 2. Live presentation 3. Conclusion 34
1. The standardised table on ENTSOG s TP 35
Standardised Table on ENTSOG s TP A few important keywords from the standardised table: - Validity approach - Different capacity units and currencies - The common unit - Conditional product type as a remark - Simulation remarks 36
2. Live presentation 37
Live presentation 38
3. Conclusion 39
Something to take away Look and feel of the new tariff section How to compare tariff information from operators Terminologies used in the TP 40
Brussels 5 October 2017 Standardized section for data publication on TSO/NRA websites Implementation approach Maria Gerova IT Project Manager, Bulgartransgaz, on behalf of ENTSOG
Agenda 1. Publication requirements 2. Form of publication 3. Structure of the standardized section 4. Implementation of the standardized section by a TSO live demonstration 42
Publication requirements 43
Form of publication Tariff information on TSOs/NRAs web-sites Tariff NC, Article 31 Form of publication The required information shall be accessible to the public, free of charge and of any limitations as to its use. It shall be published: > Via link on ENTSOG TP > In a user-friendly manner > In a clear, easily accessible way and on a nondiscriminatory basis > In a downloadable format > In the official for the MS and in EN languages With the aim to facilitate the access to the required information and enhance the market transparency, as voluntary activity ENTSOG and the TSOs developed standardized format for tariff publications on TSOs/NRAs web-sites. 44
Structure of the standardized section Tariff information on TSOs/NRAs web-sites TAR NC Description Link Further Information Information to be published before the annual yearly capacity auction Art. 29 (a) Information for standard capacity products for firm capacity (reserve prices, multipliers, seasonal factors, etc.) Link to the information of the TSO individual website Link 2 Link 3 Art. 29 (b) Information for standard capacity products for interruptible capacity (reserve prices and an assessment of the probability of interruption) Link to the information of the TSO individual website Link 2 Link 3 45
Structure of the standardized section Tariff information on TSOs/NRAs web-sites TAR NC Description Link Further Information Information to be published before the tariff period Art. 30 (1)(a) Information on parameters used in the applied reference price methodology related to the technical characteristics of the transmission system. Link to the information of the TSO individual website Link 2 Link 3 Art. 30 (2)(b) Information about the used tariff model and an explanation how to calculate the transmission tariffs applicable for the prevailing tariff period. Link to the information of the TSO individual website Link 2 Link 3 46
Standardized section - implementation 47
Something to take away - what to expect? Increased transparency of transmission tariffs More data available up to TAR NC requirements Easy to find Uniform publication structure 48
Placeholder Stakeholder view 49
2 nd Session: NRA/ACER perspective
Placeholder NRA perspective 51
Placeholder ACER perspective 52
Placeholder Stakeholder view 53
3 rd Session: Addressing stakeholder concerns
Brussels 5 October 2017 IDoc updates TAR NC Implementation Workshop Irina Oshchepkova, Tariff Subject Manager, ENTSOG Colin Hamilton, National Grid, on behalf of ENTSOG Niels Krap, ONTRAS, on behalf of ENTSOG
Agenda 1. Sources of changes 2. Stakeholder comments 3. Other updates 4. Conclusion 56
1. Sources of changes 57
Sources overview Stakeholder feedback From respondents Through ACER Internal ENTSOG discussions Further implementation developments Internal Workshops Questions at external presentations 58
Process overview Updated IDoc and all excel files for Annexes Log of comments Comparison with the 1 st IDoc Transparent approach More pages in the 2 nd IDoc as people ask for MORE! 59
Stakeholder comments All (104) 22 Comment accepted Comment partially accepted Comment not accepted 11 71 Respondents (56) ACER (48) 12 10 1 10 34 37 60
2. Stakeholder comments 2.1. Section Process and Legal 61
Scope and storage points - NC exactly defines its scope - NC does not permit limited scope rules to apply at non-ips by national decision - A possible extension by NRA does not apply to storage points - Clarity of rules application for all points - 3 categories of points: (1) IPs; (2) non-ips which are points with third countries; (3) other non-ips - Storage points are in category (3), they are not ignored in the NC 62
Existing contracts - Respondent: no additional charges for network users that are parties of the existing contracts - ACER: terms protected and grandfathered not used - ACER: additional charges (to the fixed contractual amount) may be needed to maintain the tariff level - Agree with ACER - If a network user holding an existing contract was aware of additional charges on top of those fixed in contract, the principle of legitimate expectations is respected 63
2. Stakeholder comments 2.2. Section Interruptible 64
Interruptible discounts recalculation 20% probability of interruption which triggers a recalculation: absolute figure, not a relative one - 10% to 31% (21% absolute) recalculation permitted - 10% to 12.5% (25% relative) recalculation not permitted - Use absolute figures instead of relative ones - Numerical example 65
Ex-post - Respondent: NRA cannot cap the compensation - ACER: not sure if this freedom [cap] is given - Respondent: compensation does not depend on a within-day interruption - Compensation cap may incentivise TSOs to offer interruptible capacity and may be implemented by NRAs as a safeguard - NC refers to actual interruptions 66
Non-physical backhaul - Respondent: non-physical backhaul could be regarded as conditional firm - Respondent: no reference prices at unidirectional points for capacity in direction opposite to the flow - ACER: clarify pricing examples - Non-physical backhaul is interruptible - Pricing examples, e.g. using technical capacity of a unidirectional point 67
2. Stakeholder comments 2.3. Section Information 68
Consultation and publication in English - Consultation documents and summary in English will increase the process effectiveness - Same for publication requirements - Stakeholders are likely to be highly critical otherwise - Consultation in English will foster transparency along the process - Publication in English is the most effective - Credible justification needed otherwise 69
Tariff changes and trends - Provide tariff changes/trends using actual figures for reasonable estimates - Other approaches are complementary - Wide ranging estimates (e.g. +/- 100%) are of little benefit - 3 options (ranges/percentage changes/ranges for percentage changes) are complementary to the actual forecasted tariffs - Best estimates of future tariffs 70
2. Stakeholder comments 2.4. Section Tariff model 71
Update of tariff model - Updating tariff model enables estimating possible tariff evolution beyond the prevailing tariff period - At least quarterly updates with under-/over-recovery information within the tariff period - Updates are possible and optional - Obligation is to publish the tariff model only before the tariff period - Quarterly updates may be misleading impression that tariffs may change within the tariff period 72
Forecasted contracted capacity (FCC) - Respondent: CWD unclear on FCC definition - Respondent: large degree of subjectivity in calculating the counterfactual CWD tariffs - ACER: NRA decides on the forecasting process, it can be without a TSO - FCC must be based on a best estimate - TSO input must be taken into consideration 73
CWD model - Screenshot of a postage stamp tariff model is of little use - Considerable merit in developing an EU generic CWD counterfactual tariff model - Excel files for IDoc Annexes published (postage stamp, CWD) - Example of CWD model developed: live demonstration 74
3. Other IDoc updates 75
Examples of other updates Double-check - More information on status as of September 2017 - Tariff period in Slovakia lasts 5-year until end of 2021 More details - How to calculate commodity charges - Details of flow scenario Change of approach - Use all bookings for a given month in seasonal factor methodology 76
4. Conclusion 77
Something to take away Useful exercise Change comes from all Next steps 78
Placeholder Stakeholder view 79
Brussels 5 October 2017 TAR NC and Storage TAR NC Implementation Workshop Laurent Percebois, ENTSOG Tariff Adviser Emmanuel Bouquillion, TIGF, on behalf of ENTSOG
Agenda 1. Discounts: principles and practice 2. Different cases, different adjustments 3. Reduced discounts: why and how 4. Storages and rescaling: arguments and example 81
1. Discounts: principles and practice (1/2) TAR NC indicates specific tariff provisions for storages As a default, TAR NC obliges to set a minimum discount of 50% at reference prices for facilities connected to 1 single TSO network: regular storage facilities
1. Discounts: principles and practice (2/2) No harmonisation of TSO tariffs at Storage Connection Points (SCPs) in Europe in 2017 Principle of discounts in order to avoid double charging, and due to the special contribution to system flexibility and security of supply
2. Different cases, different adjustments Regular storage facilities Facilities allowing XB use (case 1) Facilities allowing XB use (case 2) Storage discounts are subject to a TSO/NRA consultation (at least every 5 years)
3. Reduced discounts: why and how (1/2) For storage facilities that allow for cross-system use (connected to at least 2 systems) discounts may be reduced below 50%, to the extent that network users make use of such storages to compete with an IP Consequence 1: the default 50% discount applies to the share of capacities that are not used to compete with an IP Consequence 2: SSOs, TSOs, NRAs have to monitor the actual capacity use
3. Reduced discounts: why and how (2/2) How to assess the actual competition with IPs at storage facilities that allow for crosssystem use? o Stakeholders suggested a timing criterion (simultaneous exit and entry within 24h) o Criterion not sufficient for ENTSOG: bypassing of IPs justifies special consideration Today, TSOs in only 5 MSs have to deal with such specific storages: o Austria: capacity discounts applied, one single account per entry-exit system side. o France: capacity discounts higher than for regular storages due to higher risk of interruption. Two flow-based virtual storage accounts. o Germany: capacity discounts are the same. Two accounts. A flow-based corrective charge. o The Netherlands: capacity discounts are the same. One single account. o Slovakia: no storage discount currently. One single account.
4. Storages and rescaling: arguments Conflicting arguments received o Respondent: rescaling should not affect Storage Connection Points and should be applied only to other points, otherwise the post-rescaling reference price for Storage Connection Points corresponds to a discount which is lower than the one used at the pre-rescaling stage as per Article 9(1) (say, 50%) o ACER: Article 6(4)(c) states that rescaling should affect all entry points, or all exit points, or both ENTSOG agrees with ACER: after rescaling, discounts at storage points should remain the same as before rescaling, compared to non-storage points
4. Storages and rescaling: example (1/2) TSO A uses a Postage-Stamp (PS) methodology with only 2 entry points into TSO and 2 exit points from TSO o Entry points: IP Entry, Storage Entry o Exit points: Storage Exit and Consumption TSO A Storage Assumptions: o Revenue: 100 Entry-exit split: 50%-50% o Forecast contracted capacity: 30 each at Consumption and IP Entry o Forecast contracted capacity: 10 each at Storage Entry and Storage Exit o Discounts applicable at storage: 50% Consumption TSO B IP
4. Storages and rescaling: example (2/2) TSO A Storage Consumption TSO B IP Entry tariff is 50/(30+10) = 1.25; Exit tariff is 50/(30+10) = 1.25 Tariffs after discounts: 1.25 for Consumption and IP Entry, 0.625 for Storage Entry and Storage Exit but under-recovery: 100 1.25*(30+30) 0.625*(10+10) = 12.5 Rescaling: increase all tariffs by a 100/(100-12.5) factor Post-rescaling tariffs are: ~1.43 for Consumption and IP Entry, ~0.71 for Storage Entry and Storage Exit no under-recovery Post-rescaling storage tariffs are still 50% of post-rescaling non-storage tariffs
Something to take away Regular storage: default 50% discount Storage used to compete with IPs: default does not apply Rescaling: storage points also affected 90
Placeholder Stakeholder view 91
4 th Session: Up-coming year and Monitoring
Brussels 5 October 2017 Implementation and Effect monitoring TAR NC Implementation Workshop Seán Kinsella, ENTSOG Tariff Adviser
Agenda 1. ENTSOG monitoring responsibilities as per TAR NC and Regulation 715 2. Implementation Monitoring 3. Effect Monitoring 94
Implementation and Effect Monitoring Effect Monitoring - Regulation 715, Article 8(8) ENTSOG shall monitor and analyse the implementation of the network codes and their effect on the harmonisation of applicable rules aimed at facilitating market integration. Implementation Monitoring TAR NC, Article 36 ENTSOG shall monitor and analyse how transmission system operators have implemented this regulation. 95
ENTSOG & ACER Monitoring Obligations - report its findings to ACER ENTSOG shall - include the results of the analysis in the annual report... Art.8 (8) Reg 715 Monitor and analyse the implementation of the network codes their effect on the harmonization of applicable rules aimed at facilitating market integration ACER shall as well as on nondiscrimination, effective competition and the efficient functioning of the market, and report to the Commission Art.9 (1) Reg 715 Overlapping and open formulation in Art. 8 and Art. 9 of Reg. 715/2009 96
Timescale for Implementation and Effect Monitoring reports (2017-18) March June-July Identify scope August- September Data requirements October Launch questionnaire November- December Collect and verify data Approve and publish reports 31 March 2018: publication and submission to ACER May 2018: ENTSOG s annual report to include the Summary of the TAR IM and EM reports 97
Implementation Monitoring Scope Chapter 8 + early publication requirements Scope expanded All AD 1 and 2 chapters included Data collection ENTSOG/ACER collaboration - joint questionnaire ACER online tool Questionnaire For every relevant article of TAR NC Evidence based links to data publication 98
Effect Monitoring ENTSOG starting Effect Monitoring setting a benchmark CEPA proposed seven indicators Some indicators not used Some indicators revised Evolution of indicators ACER feedback - included in process 99
Effect monitoring: indicators Level and variability of regulatory account balance Multiplier level evolution Discussed indicators Tariff changes Publication of information in English Short-term / long-term bookings 10 0
Something to take away Implementation Monitoring Expanded scope Effect Monitoring Laying a benchmark ENTSOG / ACER - Collaboration 101
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Thank You for Your Attention Tariff Brussels Team ENTSOG -- European Network of Transmission System Operators for Gas Avenue de Cortenbergh 100, B-1000 Brussels EML: TAR-NC@entsog.eu WWW: www.entsog.eu